Tribunal allows justified Cenvat credit post completion certificate, dismisses appeal without legal issues

The Tribunal determined that the respondent was justified in availing proportionate Cenvat credit post completion certificate, not necessitating a full reversal. It found the respondent compliant with separate record-keeping requirements and valid in availing only proportionate credit on input services. The Tribunal held that the respondent was entitled to a refund of the reversed Cenvat credit under protest and clarified that Rule 6 did not apply to the sale of immovable property post completion certificate. The appeal was dismissed, with no significant legal questions arising from the Tribunal's decision.

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Issues Involved:
1. Admissibility of Cenvat credit under Rule 6(1) of Cenvat Credit Rules, 2004.
2. Maintenance of separate records for taxable and exempted services under Rule 6(2) and 6(3) of Cenvat Credit Rules, 2004.
3. Definition and applicability of "input service" under Rule 2(l) of Cenvat Credit Rules, 2004.
4. Refund claim of Cenvat credit reversed under protest.
5. Applicability of Rule 6 of Cenvat Credit Rules, 2004 to sale of immovable property post completion certificate.

Detailed Analysis:

1. Admissibility of Cenvat Credit under Rule 6(1):
The Tribunal considered whether the respondent was liable to reverse any portion of the Cenvat credit availed after receiving the completion certificate for the projects. The Tribunal found that the respondent was paying service tax on properties where advances were received prior to obtaining the completion certificate and availed proportionate Cenvat credit based on the square footage area. The Tribunal concluded that the respondent was justified in availing proportionate Cenvat credit, and Rule 6(1) did not necessitate a full reversal of credit.

2. Maintenance of Separate Records under Rule 6(2) and 6(3):
The Tribunal examined if the respondent maintained proper separate accounts as required under Rule 6. It was found that the respondent had maintained separate accounts by availing only proportionate credit on input services post completion certificate, supported by a CA certificate. The Tribunal concluded that this constituted sufficient compliance with the legal obligations under Rule 6(2) and 6(3).

3. Definition and Applicability of "Input Service" under Rule 2(l):
The Tribunal noted that the respondent had taken only proportionate credit after the completion certificate, which was in line with Rule 2(l) concerning "input service." The Tribunal held that the respondent's actions were legally valid and did not contravene the provisions of Rule 2(l).

4. Refund Claim of Cenvat Credit Reversed under Protest:
The Tribunal addressed the respondent's refund claim for the Cenvat credit reversed under protest. It was determined that since the respondent was not required to reverse any credit availed during the period when the output service was wholly taxable, the amounts reversed under protest could not be retained by the revenue authorities and had to be refunded.

5. Applicability of Rule 6 to Sale of Immovable Property Post Completion Certificate:
The Tribunal considered whether the sale of residential units post completion certificate amounted to providing exempted service under Rule 6. It was concluded that sale of immovable property post completion certificate is not an exempted service, and therefore, Rule 6 did not apply. The Tribunal noted that even after the amendment on 13.04.2016, the respondent had availed only proportionate credit, fulfilling the requirements of Rule 6.

Conclusion:
The Tribunal concluded that:
- The respondent was not liable to pay 8%/10% of the value of service post completion certificate under Rule 6.
- The proportionate Cenvat credit availed by the respondent was in compliance with the legal provisions.
- The respondent maintained proper separate accounts as required.
- The respondent was not required to reverse Cenvat credit availed during the period when the output service was taxable.
- The respondent was entitled to a refund of the amount paid under protest.

The appeal was dismissed, and no substantial question of law arose from the Tribunal's order.

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